<PAGE>
SCHEDULE 14a
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule 240.14a-12
THE GALAXY FUND
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE>
THE GALAXY FUND
------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
------------------------
, 1998
To the Shareholders of the
Money Market Fund, Government Fund,
U.S. Treasury Fund, Tax-Exempt Fund,
Institutional Treasury Money Market Fund
and Tax-Exempt Bond Fund of The Galaxy Fund
A Special Meeting of Shareholders (the "Meeting") of the Money Market Fund,
Government Fund, U.S. Treasury Fund, Tax-Exempt Fund, Institutional Treasury
Money Market Fund and Tax-Exempt Bond Fund of The Galaxy Fund will be held on
February 26, 1998, at 10:00 A.M. Eastern Time, at the offices of First Data
Investor Services Group, Inc., 4400 Computer Drive, Westboro, Massachusetts
01581-5108 for the following purposes:
(1) To change the fundamental investment limitations of the Money
Market, Government, U.S. Treasury and Tax-Exempt Funds: (a) to eliminate the
prohibition on investing in obligations with maturities exceeding one year;
and (b) to revise the issuer diversification requirement;
(2) To change a fundamental investment limitation of the Institutional
Treasury Money Market Fund to permit the Fund to enter into repurchase
agreements;
(3) To change a fundamental investment limitation of the Tax-Exempt Bond
Fund to permit the Fund to invest in municipal bond index futures contracts
and interest rate futures contracts; and
(4) To consider the transaction of such other business as may properly
come before the Meeting or any adjournment thereof.
The proposals referred to above are discussed in the Proxy Statement
attached to this Notice. Each shareholder is invited to attend the Special
Meeting of Shareholders in person. Shareholders of record at the close of
business on December 30, 1997 have the right to vote at the meeting. If you
cannot be present at the meeting, we urge you to fill in, sign and promptly
return the enclosed proxy in order that the meeting can be held and a maximum
number of shares may be voted.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSALS.
W. BRUCE MCCONNEL, III
SECRETARY
<PAGE>
THE GALAXY FUND
4400 COMPUTER DRIVE
WESTBORO, MASSACHUSETTS 01581-5108
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of The Galaxy Fund (the "Trust") for use at a
Special Meeting of Shareholders of the Trust's Money Market Fund, Government
Fund, U.S. Treasury Fund, Tax-Exempt Fund, Institutional Treasury Money Market
Fund and Tax-Exempt Bond Fund (each, a "Fund" and collectively, the "Funds") to
be held at the offices of the Trust's administrator and transfer agent, First
Data Investor Services Group, Inc., 4400 Computer Drive, Westboro, Massachusetts
01581-5108, on February 26, 1998, at 10:00 A.M. Eastern Time (such meeting and
any adjournment(s) thereof are referred to as the "Meeting"). It is expected
that the solicitation of proxies will be primarily by mail. In connection with
the solicitation of certain shareholders, the Trust's service contractors have
retained PROXY ADVANTAGE, a service provided by a division of First Data
Investor Services Group, Inc., to assist in the solicitation of proxies by mail
and to tabulate votes returned at a cost of approximately $ , plus
out-of-pocket expenses. The Trust's officers and service contractors may also
solicit proxies by telephone, telegraph, facsimile or personal interview. Any
shareholder giving a proxy may revoke it at any time before it is exercised by
submitting to the Trust a written notice of revocation or a subsequently
executed proxy or by attending the Meeting and electing to vote in person. This
Proxy Statement and the enclosed Proxy are expected to be distributed to
shareholders of the Funds on or about January , 1998.
The following table summarizes the proposals to be voted on at the Meeting
and indicates those shareholders who are being solicited with respect to each
proposal:
<TABLE>
<CAPTION>
PROPOSAL SHAREHOLDERS SOLICITED
- --------------------------------------------- ----------------------------------------
<S> <C> <C>
1. Approval of changes in the following
fundamental investment limitations of
the Money Market, Government, U.S.
Treasury and Tax-Exempt Funds:
(a) to eliminate the prohibition on Shareholders of the Money Market,
investing in obligations with maturities Government, U.S. Treasury and Tax-Exempt
exceeding one year; and Funds, voting separately on a
Fund-by-Fund basis.
(b) to revise the issuer diversification Shareholders of the Money Market,
requirement. Government, U.S. Treasury and Tax-Exempt
Funds, voting separately on a
Fund-by-Fund basis.
2. Approval of a change in a fundamental Shareholders of the Institutional
investment limitation of the Treasury Money Market Fund.
Institutional Treasury Money Market Fund
to permit the Fund to enter into
repurchase agreements.
3. Approval of a change in a fundamental Shareholders of the Tax-Exempt Bond
investment limitation of the Tax-Exempt Fund.
Bond Fund to permit the Fund to invest
in municipal bond index futures
contracts and interest rate futures
contracts.
</TABLE>
A Proxy is enclosed with respect to the shares you own in each of the Funds.
If the Proxy is executed properly and returned, the shares represented by it
will be voted at the Meeting in accordance with the instructions thereon. Each
full share is entitled to one vote and each fractional share to a proportionate
fractional vote. If you do not expect to be present at the Meeting and wish your
shares to be voted, please complete the enclosed Proxy and mail it in the
enclosed reply envelope.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE APPROVAL OF EACH PROPOSAL
DESCRIBED IN THIS PROXY STATEMENT.
<PAGE>
(PROPOSAL 1)
(MONEY MARKET FUND, GOVERNMENT FUND,
U.S. TREASURY FUND AND TAX-EXEMPT FUND)
Fleet Investment Advisors Inc. ("Fleet"), the Trust's investment adviser,
has recommended to the Board of Trustees that certain of the Funds' fundamental
investment limitations be amended as described below.
PROPOSAL 1(a)
ELIMINATION OF THE FUNDS' FUNDAMENTAL INVESTMENT LIMITATION PROHIBITING
INVESTMENTS IN OBLIGATIONS WITH MATURITIES EXCEEDING ONE YEAR
Shareholders of the Money Market, Government, U.S. Treasury and Tax-Exempt
Funds are being asked to approve the elimination of the fundamental investment
limitation that currently provides that the Funds may not "invest in obligations
having remaining maturities in excess of one year, except that certain variable
and floating rate instruments and securities subject to repurchase agreements
may bear longer maturities (provided certain provisions are met)." The rules of
the Securities and Exchange Commission ("SEC") permit money market funds to
invest in instruments with remaining maturities in excess of one year.
The Trust's Board of Trustees has approved, at the recommendation of Fleet,
the elimination of that limitation. Fleet recommended this change in order that
the Funds will be able to invest in obligations with the same maturities as
other money market funds. Subject to approval of the proposal by shareholders at
the Meeting, each Fund would be permitted to invest in obligations with
maturities permitted by the SEC's rules. Currently, these rules permit a money
market fund to invest in instruments with remaining maturities of 397 days or
less (with certain exceptions) and require a money market fund to maintain a
dollar-weighted average portfolio maturity of 90 days or less, subject to the
quality, diversification and other requirements of Rule 2a-7 under the
Investment Company Act of 1940, as amended, (the "1940 Act") and other rules of
the SEC.
The proposal to eliminate the Funds' investment limitation as to the
maturity of its portfolio instruments in order to permit the Funds to invest in
obligations with maturities permitted by the SEC's rules must be approved at the
Meeting by the holders of "a majority of the outstanding shares" of each of the
Money Market, Government, U.S. Treasury and Tax-Exempt Funds voting separately
by Fund, irrespective of class. (See "Voting Information" below).
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" ELIMINATING
THE FUNDAMENTAL INVESTMENT LIMITATION IN ORDER TO PERMIT THE MONEY MARKET,
GOVERNMENT, U.S. TREASURY AND TAX-EXEMPT FUNDS TO INVEST IN OBLIGATIONS WITH
MATURITIES PERMITTED BY THE SEC'S RULES.
PROPOSAL 1(b)
REVISION OF THE FUNDS' FUNDAMENTAL INVESTMENT LIMITATION CONCERNING ISSUER
DIVERSIFICATION
Shareholders of the Money Market, Government, U.S. Treasury and Tax-Exempt
Funds are also being asked to approve a revision to the fundamental investment
limitation concerning issuer diversification which currently provides that the
Funds may not "[p]urchase securities of any one issuer, other than U.S.
Government obligations, if immediately after such purchase more than 5% of the
value of its total assets would be invested in the securities of such issuer
. . . except that up to 25% of the value of its total assets may be invested
without regard to this limitation."
2
<PAGE>
The Trust's Board of Trustees has approved, at the recommendation of Fleet,
a revision to the fundamental issuer diversification limitation of these Funds.
As amended, the fundamental issuer diversification limitation would provide that
no Fund may:
Purchase securities of any one issuer, if immediately after such
purchase more than 5% of the value of its total assets would be invested
in the securities of such issuer, except that up to 25% of the value of
its total assets may be invested without regard to this limitation;
notwithstanding the foregoing restriction, the Fund may invest without
regard to the 5% limitation in U.S. Government obligations and as
otherwise permitted in accordance with Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "1940 Act"), or any successor rule.
The proposed revised fundamental investment limitation permits each Fund to
operate in accordance with a diversification policy as may be permitted from
time to time in accordance with Rule 2a-7 under the 1940 Act (the "Rule"). In
particular, the proposed revised fundamental investment limitation will make
possible new flexibility with respect to issuer diversification requirements
provided for money market funds which do not hold themselves out as distributing
income exempt from regular Federal income tax, like the Money Market, Government
and U.S. Treasury Funds, by recent amendments to the Rule. The revised
fundamental investment limitation also will permit the Tax-Exempt Fund to
operate in accordance with the amended Rule. Each Fund currently may not invest
more than 5% of its total assets in the securities of any one issuer, other than
U.S. Government obligations, except that up to 25% of the value of its total
assets may be invested without regard to this 5% limitation. The recent
amendments to the Rule would permit the Funds to exclude from this issuer
diversification requirement securities that are subject to a guarantee (i) from
a party that does not control, is not controlled by and is not under common
control with the issuer of the security subject to a guarantee or (ii) from a
sponsor of a special purpose entity with respect to an asset-backed security in
accordance with the Rule. In addition, under the amended Rule each Fund may
invest in shares issued by another money market fund without regard to the 5%
limitation, if the Board of Trustees of the Fund or its delegate reasonably
believes that the money market fund in which the Fund has invested is in
compliance with the Rule's diversification requirements. The amended Rule
permits each Fund to invest up to 25% of its total assets in first tier
securities (as defined in the Rule) of a single issuer for a period of up to
three business days after purchase thereof.
The proposal to change the Funds' fundamental investment limitation with
respect to issuer diversification must be approved at the Meeting by the holders
of "a majority of the outstanding shares" of each of the Money Market,
Government, U.S. Treasury and Tax-Exempt Funds voting separately by Fund,
irrespective of class. (See "Voting Information" below).
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" REVISING THE
FUNDAMENTAL INVESTMENT LIMITATION WITH RESPECT TO ISSUER DIVERSIFICATION OF THE
MONEY MARKET, GOVERNMENT, U.S. TREASURY AND TAX-EXEMPT FUNDS.
(PROPOSAL 2)
(INSTITUTIONAL TREASURY MONEY MARKET FUND)
The Board of Trustees has approved, at the recommendation of Fleet, a
proposal to permit the Institutional Treasury Money Market Fund to invest in the
obligations of all agencies and instrumentalities of the U.S. Government and,
subject to shareholder approval at this Meeting as discussed below, to enter
into repurchase agreements relating to those obligations. Fleet recommended
these investment policy changes because it believes they will provide the Fund
with increased flexibility and assist the Fund in achieving its investment
objective. Previously, the Fund was only permitted to invest in obligations
issued or guaranteed by the U.S. Government, the interest income from which
generally was not subject to state income tax by reason of current federal law.
This investment policy prevented the Fund from investing in most U.S. Government
agency obligations and from entering into repurchase agreements. By expanding
the types of U.S. Government obligations in which it may invest and by having
the ability to enter into
3
<PAGE>
repurchase agreements, the Fund will no longer be able to offer shareholders
interest income that is entirely free from state income tax. The investment
objective of the Fund, to seek current income with liquidity and stability of
principal, will not change. As a result of the modification in the type of
obligations in which the Fund may invest, however, a change in the name of the
Fund is required under the SEC's rules. Accordingly, the Board of Trustees has
approved a proposal to change the name of the Institutional Treasury Money
Market Fund to the Institutional Government Money Market Fund.
As previously noted, shareholders of the Fund are being asked to approve a
change in a fundamental investment limitation to permit the Fund to engage in
repurchase agreements relating to obligations of the U.S. Government and its
agencies and instrumentalities. The fundamental investment limitation currently
provides that the Fund "[m]ay not make loans, except that the Fund may purchase
or hold debt instruments in accordance with its investment objectives and
policies." Because repurchase agreements are considered loans under the 1940 Act
and the Fund's present investment limitation does not contain an exception for
repurchase agreements, the Fund is presently prohibited from engaging in
repurchase agreements. The Trust's Board of Trustees has approved, at the
recommendation of Fleet, an amendment to the fundamental investment limitation
that would permit the Fund to enter into repurchase agreements. As amended, the
fundamental investment limitation will be changed to provide that the Fund
"[m]ay not make loans, except that the Fund (i) may purchase or hold debt
instruments in accordance with its investment objective and policies, and (ii)
may enter into repurchase agreements with respect to portfolio securities".
In a repurchase agreement, the Fund would purchase portfolio securities
subject to the seller's agreement to repurchase them at a mutually specified
date and price. These transactions must be fully collateralized at all times,
but involve the risk that the seller under a repurchase agreement may default on
its obligation. If the seller defaulted on its repurchase obligation, the Fund
would suffer a loss to the extent that the proceeds from a sale of the
underlying securities (including accrued interest) were less than the repurchase
price (including accrued interest) under the agreement. In the event that such a
defaulting seller filed for bankruptcy or became insolvent, disposition of such
securities by the Fund might be delayed pending court action.
The investment policy changes described above, including the change in the
Fund's name, will become effective on February 28, 1997, subject to shareholder
approval in the case of the change in the Fund's fundamental investment
limitation to permit it to enter into repurchase agreements. The investment
policy change permitting the Fund to invest in the obligations of all U.S.
Government agencies and instrumentalities and the corresponding change in the
Fund's name do not require shareholder approval and are not contingent on
shareholder approval of the proposal with respect to repurchase agreements.
The proposal to change the investment limitation of the Institutional
Treasury Money Market Fund to permit the Fund to enter into repurchase
agreements must be approved by the holders of "a majority of the outstanding
shares" of the Fund. (See "Voting Information" below).
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" CHANGING THE
FUNDAMENTAL INVESTMENT LIMITATION TO PERMIT THE INSTITUTIONAL TREASURY MONEY
MARKET FUND TO ENTER INTO REPURCHASE AGREEMENTS.
PROPOSAL 3
(TAX-EXEMPT BOND FUND)
Shareholders of the Tax-Exempt Bond Fund are being asked to approve a change
in a fundamental investment policy of the Fund to permit it to invest in
municipal bond index futures contracts and interest rate futures contracts. The
fundamental investment limitation of the Fund presently provides that the Tax-
Exempt Bond Fund may not "[p]urchase or sell commodities or commodity contracts
or invest in oil, gas or other mineral exploration or development programs or
mineral leases." Trust counsel has advised that this
4
<PAGE>
limitation prohibits the Fund from investing in futures contracts because such
contracts may be considered to be commodity contracts.
The Trust's Board of Trustees has approved, at the recommendation of Fleet,
an amendment to the fundamental investment limitation of the Tax-Exempt Bond
Fund that would remove the current prohibition on investments in municipal bond
index futures contracts and interest rate futures contracts. Fleet recommended
this change because it believes that the ability to invest in such futures
contracts will provide the Fund with increased flexibility and will assist it in
achieving its investment objective. As amended, the fundamental investment
limitation on commodity contracts would provide that the Tax-Exempt Bond Fund
may enter into municipal bond index futures contracts and interest rate futures
contracts to the extent permitted under the Commodity Exchange Act and the 1940
Act. However, the Fund will continue to be prohibited from purchasing or selling
commodities or other commodity contracts or investing in oil, gas, or other
mineral exploration or development programs or mineral leases.
Subject to approval of the proposed amendment by shareholders at the
Meeting, the Tax-Exempt Bond Fund would be permitted to enter into municipal
bond index futures contracts and interest rate futures contracts. A municipal
bond index futures contract represents a firm commitment by which two parties
agree to take or make delivery of an amount equal to a specified dollar amount
multiplied by the difference between the municipal bond index value (the values
assigned daily to the municipal bonds included in the index based on the
independent assessment of dealer-to-dealer municipal bond brokers) on the last
trading date of the contract and the price at which the futures contract is
originally struck. No physical delivery of the underlying securities in the
index is made. Interest rate futures contracts, which provide for the future
delivery of fixed income securities, are similar to municipal bond index futures
contracts except that, instead of a municipal bond index, the "underlying
commodity" is represented by various types of fixed income securities. The Fund
currently does not intend to engage in futures transactions for speculation, but
only to hedge against changes in the market values of securities which the Fund
holds or intends to purchase. The purchase of futures instruments in connection
with securities which the Fund intends to purchase currently requires an amount
of cash or other liquid assets, equal to the market value of the outstanding
futures contracts, to be deposited in a segregated account to collateralize the
position and thereby insure that the use of futures is unleveraged.
Transactions in futures as a hedging device may subject the Fund to a number
of risks. Successful use of futures by the Fund is subject to the ability of
Fleet to anticipate movements in the direction of the market. There may also be
an imperfect correlation, or no correlation at all, between movements in the
price of futures contracts and movements in the price of the instruments being
hedged. There is no assurance that a liquid market will exist for any particular
futures contract at any particular time. Consequently, for these and other
reasons the Fund may realize a loss on a futures transaction that is not offset
by a favorable movement in the price of securities which the Fund holds or
intends to purchase or the Fund may be unable to close out a futures position in
the event of adverse price movements. Any income from investments in futures
contracts will be taxable.
The proposal to change the Tax-Exempt Bond Fund's investment limitation to
permit investments in municipal bond index futures contracts and interest rate
futures contracts must be approved at the Meeting by the holders of "a majority
of the outstanding shares" of the Tax-Exempt Bond Fund, irrespective of class.
(See "Voting Information" below).
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" CHANGING THE
FUNDAMENTAL INVESTMENT LIMITATION TO PERMIT THE TAX-EXEMPT BOND FUND TO ENTER
INTO MUNICIPAL BOND INDEX FUTURES CONTRACTS AND INTEREST RATE FUTURES CONTRACTS.
5
<PAGE>
VOTING INFORMATION
RECORD DATE. Only shareholders of record of the Funds at the close of
business on December 30, 1997 will be entitled to vote at the Meeting. On that
date, the outstanding shares were as follows:
<TABLE>
<CAPTION>
NUMBER OF
FUNDS AND CLASSES OF SHARES SHARES OUTSTANDING
- ---------------------------------------------------------------------- -------------------
<S> <C>
Money Market Fund
Class A (Retail A)..................................................
Class A--Special Series 1 (Trust)...................................
Class A--Special Series 2 (Retail B)................................
------
Total.............................................................
Government Fund
Class B (Retail A)..................................................
Class B--Special Series 1 (Trust)...................................
------
Total.............................................................
U.S. Treasury Fund
Class F (Retail A)..................................................
Class F--Special Series 1 (Trust)...................................
------
Total.............................................................
Tax-Exempt Fund
Class E (Retail A)..................................................
Class E--Special Series 1 (Trust)...................................
------
Total.............................................................
Institutional Treasury Money Market Fund
Class S.............................................................
------
Total.............................................................
Tax-Exempt Bond Fund
Class M--Series 1 (Trust)...........................................
Class M--Series 2 (Retail A)........................................
Class M--Series 3 (Retail B)........................................
------
Total.............................................................
</TABLE>
MAJORITY OF OUTSTANDING SHARES. The term "a majority of the outstanding
shares" of a Fund means the lesser of (i) more than 50% of the outstanding
shares of the Fund, or (ii) 67% or more of the shares of the Fund present at the
Meeting if more than 50% of the outstanding shares of the Fund are represented
at the Meeting in person or by proxy.
QUORUM. A quorum is constituted with respect to a Fund by the presence in
person or by proxy of the holders of more than 50% of the outstanding shares of
each Fund entitled to vote at the Meeting. For purposes of determining the
presence of a quorum for transacting business at the Meeting, abstentions, but
not broker "non-votes" (that is, proxies from brokers or nominees indicating
that such persons have not received instructions from the beneficial owners or
other persons entitled to vote shares on a particular matter with respect to
which the brokers or nominees do not have discretionary power), will be treated
as shares that are present at the Meeting but which have not been voted.
Abstentions and broker "non-votes" will have the effect of a "no" vote for
purposes of obtaining the requisite approval of each proposal.
6
<PAGE>
In the event that a quorum is not present at the Meeting, or in the event
that a quorum is present at the Meeting but sufficient votes to approve any of
the proposals are not received, the persons named as proxies, or their
substitutes, may propose one or more adjournments of the Meeting to permit the
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares affected by the adjournment that
are represented at the Meeting in person or by proxy. If a quorum is present,
the persons named as proxies will vote those proxies which they are entitled to
vote FOR the proposals in favor of such adjournments, and will vote those
proxies required to be voted AGAINST the proposals against any adjournment.
At the record date for the Meeting, affiliates of Fleet owned of record
%, %, %, %, % and % of the outstanding shares of the Money
Market Fund, Government Fund, U.S. Treasury Fund, Tax-Exempt Fund, Institutional
Treasury Money Market Fund and Tax-Exempt Bond Fund, respectively, as trustee,
agent or custodian for their respective customers. The agreements with these
affiliates of Fleet governing the accounts of beneficial owners of shares of the
Funds generally provide the affiliates with the discretion to vote all shares
held by them of record. The affiliates of Fleet intend to exercise this
discretion and to vote all shares of the Funds held by them FOR each Proposal
set forth on the enclosed proxy form applicable to the Funds. The name, address
and share ownership of each person who may have possessed sole or shared voting
or investment power with respect to 5% or more of the outstanding shares of any
Fund at that date were:
<TABLE>
<CAPTION>
NAME AND CLASS AND AMOUNT PERCENTAGE OF PERCENTAGE OF
FUND ADDRESS OF SHARES OWNED CLASS OWNED FUND SHARES OWNED
- ------------------------------------------------ ------------- --------------------- --------------- -----------------------
<S> <C> <C> <C> <C>
</TABLE>
As of December 30, 1997, the trustees and officers of the Trust, as a group,
owned less than 1% of the outstanding shares of each Fund.
INFORMATION ABOUT ADVISER, ADMINISTRATOR AND DISTRIBUTOR
INVESTMENT ADVISER. Fleet Investment Advisors Inc., with principal offices
located at 75 State Street, Boston, Massachusetts 02109, serves as investment
adviser to the Funds. Fleet is an indirect wholly-owned subsidiary of Fleet
Financial Group, Inc., a registered bank holding company.
ADMINISTRATOR. First Data Investor Services Group, Inc., located at 4400
Computer Drive, Westboro, Massachusetts 01581-5108, serves as the Funds'
administrator. First Data Investor Services Group, Inc. is a wholly-owned
subsidiary of First Data Corporation.
DISTRIBUTOR. First Data Distributors, Inc., a wholly-owned subsidiary of
First Data Investor Services Group, Inc., serves as the Funds' distributor.
First Data Distributors, Inc. is a registered broker/dealer with principal
offices located at 4400 Computer Drive, Westboro, Massachusetts 01581-5108.
OTHER MATTERS
The Trust does not intend to hold Annual Meetings of Shareholders except to
the extent that such meetings may be required under the 1940 Act or state law.
Shareholders who wish to submit proposals for inclusion in the Proxy Statement
for a subsequent shareholder meeting should send their written proposals to the
Trust at its principal office within a reasonable time before such meeting.
7
<PAGE>
No business other than the matters described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment of the Meeting, the persons
named in the enclosed Proxy will vote thereon according to their best judgment
in the interests of the Trust.
Dated: , 1998
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO
HAVE THEIR SHARES VOTED ARE REQUESTED TO COMPLETE THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
THE TRUST WILL FURNISH, WITHOUT CHARGE, COPIES OF THE TRUST'S ANNUAL REPORTS
TO SHAREHOLDERS DATED OCTOBER 31, 1997 TO ANY SHAREHOLDER UPON REQUEST. THE
TRUST'S ANNUAL REPORTS TO SHAREHOLDERS MAY BE OBTAINED FROM THE TRUST BY WRITING
TO THE TRUST AT 4400 COMPUTER DRIVE, WESTBORO, MASSACHUSETTS 01581-5108 OR BY
CALLING 1-800-628-0414.
8
<PAGE>
THE GALAXY FUND
MONEY MARKET FUND, GOVERNMENT FUND, U.S. TREASURY FUND, TAX-EXEMPT FUND,
INSTITUTIONAL TREASURY MONEY MARKET FUND AND TAX-EXEMPT BOND FUND
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE GALAXY FUND FOR USE
AT A SPECIAL MEETING OF SHAREHOLDERS OF THE MONEY MARKET FUND, GOVERNMENT FUND,
U.S. TREASURY FUND, TAX-EXEMPT FUND, INSTITUTIONAL TREASURY MONEY MARKET FUND
AND TAX-EXEMPT BOND FUND (THE "FUNDS") TO BE HELD ON FEBRUARY 26, 1998, AT 10:00
A.M. EASTERN TIME, AT THE OFFICES OF FIRST DATA INVESTOR SERVICES GROUP, INC.,
4400 COMPUTER DRIVE, WESTBORO, MASSACHUSETTS 01581-5108.
THE UNDERSIGNED HEREBY APPOINTS JYLANNE DUNNE, JOHN J. BURKE, III AND
CHRISTINE P. RITCH, AND EACH OF THEM, WITH FULL POWER OF SUBSTITUTION, AS
PROXIES OF THE UNDERSIGNED TO VOTE AT THE ABOVE-STATED SPECIAL MEETING, AND AT
ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF, ALL SHARES OF BENEFICIAL INTEREST
EVIDENCING INTERESTS IN THE FUNDS HELD OF RECORD BY THE UNDERSIGNED ON DECEMBER
30, 1997, THE RECORD DATE FOR THE MEETING, UPON THE FOLLOWING MATTERS AND UPON
ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
FOR EACH OF THE MONEY MARKET, GOVERNMENT, U.S. TREASURY AND TAX-EXEMPT FUNDS
ONLY:
(1a) Proposal to eliminate the fundamental investment limitation of the Fund
that prohibits investments in obligations with maturities exceeding one
year.
/ / FOR / / AGAINST / / ABSTAIN
(1b) Proposal to revise the fundamental investment limitation of the Fund with
respect to issuer diversification.
/ / FOR / / AGAINST / / ABSTAIN
FOR THE INSTITUTIONAL TREASURY MONEY MARKET FUND ONLY:
(2) Proposal to change a fundamental investment limitation of the Fund to permit
the Fund to enter into repurchase agreements.
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FOR THE TAX-EXEMPT BOND FUND ONLY:
(3) Proposal to change a fundamental investment limitation of the Fund to permit
the Fund to invest in municipal bond index futures contracts and interest
rate futures contracts.
/ / FOR / / AGAINST / / ABSTAIN
FOR ALL FUNDS:
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED
HEREON AND, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING
AUTHORITY TO VOTE "FOR" PROPOSALS 1a, 1b, 2 AND 3.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY OR EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
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SIGNATURE DATE
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SIGNATURE (JOINT OWNERS) (DATE)
